Saturday mail delivery cut to trim costs

Local mailboxes soon will be empty on Saturdays, as the U.S. Postal Service announced Wednesday it will stop delivering mail on weekends.

The transition is slated for Aug. 5, 2013. The Postal Service will continue to deliver packages Mondays through Saturdays, and mail addressed to post office boxes also will be delivered Mondays through Saturdays. Post offices now open on Saturdays will remain open on Saturdays.

Brian Sperry, a regional spokesman for the U.S. Postal Service, said this change will save the organization a projected $2 billion annually.

"This will help the Postal Service take significant steps to return the organization to long-term financial stability," he said. "... We realized we needed to make changes and adapt."

The decision comes after the Postal Service reported an estimated $15.9 billion loss last year. The financial losses for the fiscal year ending Sept. 30 were more than triple the $5.1 billion loss in the previous year.

Over the past several years, the Postal Service had advocated shifting to a five-day delivery schedule for mail and packages, and it repeatedly but unsuccessfully appealed to Congress to approve the move. An independent agency, the Postal Service receives no tax dollars for its day-to-day operations but is subject to congressional control.

Sperry said the Postal Service chose to announce its decision six months in advance to give residential and business customers time to adjust to the change.

He reported market research indicated seven out of 10 Americans supported the switch as a way for the Postal Service to reduce costs. In a survey, customers indicated Saturday was the best day to cut mail service. It's the day with the lowest mail volume, Sperry said, and many businesses already are closed that day.

The Postal Service elected not to cut package delivery since it has become an increasingly important part of the organization's services, growing 14 percent in the past two years.

However, the increase in package delivery contrasts with the delivery of letters and other mail, which has declined with the use of email and other Internet services. Sperry said more and more people are paying bills online instead of through the mail, and that shift has impacted the Postal Service.

"It's hard to beat 'free,'" he said. "... It's convenient."

Sperry said if customers are concerned about not having Saturday mail delivery, they can rent a post office box and still receive letters.

The agency's biggest problem — and the majority of the red ink in 2012 — was due to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.

The health payments are a requirement imposed by Congress in 2006 that the post office set aside $55 billion in an account to cover future medical costs for retirees. The idea was to put $5.5 billion a year into the account for 10 years.

Page 2 of 2 - No other government agency is required to make such a payment for future medical benefits. Postal authorities wanted Congress to address the issue last year, but because lawmakers finished their session without getting it done, officials are moving ahead to accelerate their own plan for cost-cutting.

The Postal Service is in the midst of a major restructuring throughout its retail, delivery and mail processing operations. Since 2006, it has cut annual costs by about $15 billion, reduced the size of its career workforce by 193,000 or by 28 percent, and has consolidated more than 200 mail processing locations.